Westminster Policy News & Legislative Analysis

UK Offshore Wind Compensation Rules Change on 21 May 2026

The statutory instrument published on legislation.gov.uk, the Conservation of Habitats and Species (Offshore Wind) (Amendment etc.) Regulations 2026, was made on 8 May 2026 and comes into force on 21 May 2026. The instrument was signed by Emma Hardy, Parliamentary Under-Secretary of State at the Department for Environment, Food and Rural Affairs, and made under section 293 of the Energy Act 2023 after approval by both Houses of Parliament and consultation required by that Act. According to the Regulations, the changes extend across England and Wales, Scotland and Northern Ireland. Their focus is specific: they reset the legal framework for compensatory measures where certain offshore wind plans or projects are permitted to proceed despite a negative habitats assessment affecting protected marine sites.

The change applies to 'relevant offshore wind plans or projects' as newly defined in the 2017 habitats regulations. The explanatory note says these are, broadly, offshore wind activities for which the Secretary of State is the regulation-making appropriate authority under the Energy Act 2023, covering UK offshore waters, the English inshore region and some activity in Welsh and Northern Ireland inshore waters. The trigger remains a decision to agree, or uphold on review, a project after a negative assessment of effects on a European site, a European offshore marine site or, in the inshore regime, a Ramsar site. The Regulations do not remove that assessment stage. They alter the compensation stage that follows it.

The central legal change is that the existing duties in regulation 68 of the Conservation of Habitats and Species Regulations 2017 and regulation 36 of the Conservation of Offshore Marine Habitats and Species Regulations 2017 are disapplied for these offshore wind cases. In their place, new regulation 68ZA for the inshore regime and new regulation 36A for the offshore regime require the appropriate authority to secure 'appropriate compensatory measures'. That phrase now has a defined statutory meaning. The measures must benefit the UK marine protected area network in a way that is reasonably proportionate to the adverse effects, or predicted adverse effects, on the affected site. The explanatory note states that this replaces the earlier duty framed around protection of the overall coherence of the national site network.

The instrument also removes, for this compensation function, certain existing duties in the 2017 regulations to exercise functions so as to secure compliance with or have regard to the Habitats and Wild Birds Directives. For these offshore wind compensation decisions, the governing test is instead the new domestic framework in regulation 68ZA or 36A, read with the published guidance. Selection of measures must follow a published compensation hierarchy. That hierarchy must usually give priority to measures benefiting the features of the site that are or may be harmed, but it may also allow a different choice where that would deliver greater ecological benefit to the UK marine protected area network.

The Regulations also create a separate category of 'wider compensatory measures'. These are measures that assist the UK marine protected area network without directly benefiting the features of the particular site that are or may be adversely affected. Such measures require formal approval from the Secretary of State or, in defined devolved cases, from the Welsh Ministers or Scottish Ministers. The publishing authority must issue guidance explaining how proportionality decisions are to be made and how the compensation hierarchy is to be applied. Decision-makers must have regard to that guidance. Before revising either the guidance or the hierarchy, the relevant authority must consult the other administrations, including the Department of Agriculture, Environment and Rural Affairs in Northern Ireland.

The amendments do not stop at individual consents. They also reach national policy statements, marine policy statements and marine plans that include a relevant offshore wind plan or project. In those cases, the instrument narrows the operation of regulation 109 where the negative assessment arises from the offshore wind element, and places the Secretary of State under a duty to secure compensatory measures that would satisfy the new statutory test. This is significant for strategic planning as well as project authorisation. It means the same compensation approach can apply where offshore wind is embedded in a wider planning or policy document, not only where a developer is seeking a stand-alone consent.

Responsibility for guidance is split across administrations. Under the inshore regime, the Secretary of State must publish the guidance and compensation hierarchy, although the Welsh Ministers may choose to publish their own version for the exercise of their functions. Under the offshore regime, the relevant authority is the Secretary of State, the Welsh Ministers or the Scottish Ministers, with a specific provision allowing the Secretary of State to act where Welsh Ministers decide not to publish. The review timetable is written into the instrument. The Secretary of State must review the regulatory provisions and connected guidance, and publish a first report before 30 April 2031, followed by later reports at intervals of no more than five years. Scottish Ministers and, where they publish their own material, Welsh Ministers must review their guidance and compensation hierarchies on the same cycle.

For offshore wind developers, planners, environmental advisers and public authorities, the practical effect is a change in how compensation proposals will need to be evidenced from 21 May 2026. The statutory question is no longer confined to measures aimed only at the damaged site. Authorities may consider whether a package offers proportionate benefit across the UK marine protected area network, provided the hierarchy is followed and any wider measure receives the required approval. For marine regulation teams, that changes the documentation burden as much as the ecological test. Project files will need to show not only the adverse effects and the proposed response, but also why the chosen package fits the published hierarchy, why it is proportionate, and which authority has approved it. The explanatory note adds that a full impact assessment has been published alongside the instrument and Explanatory Memorandum.